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Michele Lerner, a contributing writer to The Motley Fool, has been writing about personal finance and real estate for more than two decades. Her work has been published in a wide range of publications and websites including Bankrate, The Washington Post, Insurance.com, HSH.com, REIT magazine, National Real Estate Investor magazine, The Washington Times, Urban Land magazine, Investopedia, and in numerous Realtor association publications. She is the author of “HOMEBUYING: Tough Times, First Time, Any Time.”

In 2008, when the foreclosure crisis was raging, Simone Griffin was spending her days counseling homeowners who were behind on their mortgage payments, and her nights worrying about the precarious state of her own finances.

Griffin owed a total of $32,000 on two credit cards. And while she always wanted to get out of debt, up until then she had taken only occasional passive steps to reduce her credit card balances rather than aggressively working to solve the problem.

It was during her discussions with people about to lose their homes that she started to realize her situation wasn't so different from those of her clients -- many were similar in age, income, and financial situation.

Scared Straight

Griffin refers to it as her "scared straight" moment.

"My credit cards were maxed out. I felt completely choked," says Griffin, who is now the director of affiliate relations at HomeFree-USA in Hyattsville, Md. "I was making only enough money to pay the minimum on my bills, so if anything went wrong -- even something as little as needing to spend a few extra dollars on gas -- I was in trouble."

She had purchased a home in 2001 in the Washington, D.C., area that she rented out after she moved to Atlanta in 2007.

While she now calls her D.C. rental property her "saving grace," in 2008, it was her financial albatross. That year, from March to December, she didn't have a tenant and needed to keep up with the mortgage without any rental income.

"I vowed that the minute I had tenants in that house, I would take every penny I had to pay off my credit card debt," says Griffin.

A Racy Income Replacement Plan

With the rental property draining her bank account month after month, Griffin began supplementing her income by hosting "Passion Parties," a contemporary version of Tupperware parties that sells adult toys instead of food storage containers.

Her expenses in Atlanta were low because she was living with someone who shared living costs, so she was able to keep up with her mortgage and pay the minimum on her other bills on time with her salary and side business income.

Then on Dec. 1, 2008, new tenants moved into her rental property. Griffin dedicated their rent checks to the task of paying down her credit card debt. "I even took their security deposit to pay off part of the balance, which I know was crazy, but I was just eager to pay off all my debt."

Griffin slashed her spending as deeply as possible, which meant she stopped going out with friends and quit buying most nonessentials. She did, however, allow herself one small indulgence to help her stay motivated: "Once each month, I'd have my nails done for $35," she says. "I really recommend that everyone trying to get out of debt allow themselves one little luxury, up to, say, $50 or so, depending on their income."

Fighting Plastic with Plastic

One of the main strategies Griffin used to pay down the debt she had piled up on credit cards was other credit cards.

Since Griffin paid her bills on time, she qualified for three new credit cards with zero-percent balance transfer offers.

"I used creditcards.com to find the best deals, and then I used only 30% of the credit limit on each card so that even though I was taking on new credit, I wasn't taking a big hit on my credit score," says Griffin.

The key to making this strategy work is having the discipline to put no new charges -- except for the transferred balanced -- on the new lower-interest rate card. "I used the balance transfers to pay down my American Express card balance. My other credit card had an interest rate of 10%, so I just kept paying down that balance with extra payments."

Constant spending vigilance isn't easy to stick to day-in and day-out. It takes its toll, as it eventually did on Griffin's resolve to pay off her credit card balances.

In January 2010, Griffin says she was drained by more than a year of sticking to a tight budget and working as much as she could to bring in extra income.

"I knew I was working toward a goal and making progress, but I was just exhausted and getting sick of the whole thing," says Griffin. She likens it to dieting. "You just get so tired of working out and eating carrot sticks and all you want is a big piece of cake."

Griffin found her enthusiasm renewed after hearing financial expert Dave Ramsey's radio show and reading his book, Total Money Makeover. "I would listen to people do their 'debt-free scream' every Friday and it was inspiring ... These were people who had kids and made less money than I did, but they had managed to pay off all their debt," she says.

The show helped Griffin get through the remainder of her pay-down period. She says Ramsey's message of making your financial goals specific, time-sensitive, and measurable resonated with her and helped her stick with her self-imposed credit-free diet.

By Aug. 4, 2010, every dollar of her credit debt had been paid in full -- a success she also credits to the rental income on her home.

Flipping the Switch to Saving

During Griffin's personal debt repayment plan, she kept no cash in the bank. In retrospect, she recognizes that this exposed her to the risk of further financial hardship had an emergency arisen. Since then, she's rectified the situation: Within one year, she had saved six months of expenses for her emergency savings account.

Her two original credit card accounts are still open. (She kept them to maintain a longer credit history.) But once all the balances reached zero, she closed her newer, balance-transfer credit card accounts. She has also returned to Washington, D.C., where she lives in the home she once rented -- and today she shares it with two tenants to give her some added income.

Griffin's advice for others mired in credit card debt: "Make an honest assessment of your spending, and put it in writing. Although I love technology, I wrote everything down in a notebook and I still do that to see where I came from and where I am now."

Intro to different retirement accounts

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Trouble is this country is built on credit. We have a Gov't that can't balance it's own budget, yet we expect individuals to be fiscally responsible. It's become beyond reprehensible. Banks are totally irresponsible as are most people. Give people enough (credit) rope and they'll definitely hang themselves. We live in a society that wants immediate gratification and thinks it needs all kinds of things. In the meantime, I don't know of any high schools or colleges out there that require a semester or two of personal finance courses. Maybe, if they made this mandatory in schools we wouldn't have a bunch of financial illiterates out there crying the blues, getting into overwhelming debt and looking for government bail outs and hand out if not out right foregiveness.

Two points should be highlighted here: 1) Mortgage counsellors should not be trusted when it comes to debt because they probably don't know what they're talking about and 2) Even suggesting lightly that those with massive consumer debt should get more cards so they can pay off the ones they have is a nuclear, dangerous, mostly irresponsible suggestion. Are you sure this article wasn't written by the credit card companies themselves? What's that I see in the upper righthand corner of this page? Caveat emptor, it's a massive, bright red ad for PC Financial World MasterCard!